PRINCIPAL COMMISSIONR OF INC vs. M/S.MUKTHA INFRASTRUCTURE (P

TCA/180/2021HC Madras30 August 2022Bench: Hon`ble Mr Justice R. MAHADEVAN4 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court did not decide the substantial questions of law on merits. Instead, the Court took note of the submission made by the learned Standing Counsel for the appellant/Revenue regarding CBDT Circular No. 17/2019. This circular mandates that appeals shall not be filed or pursued by the Department before the High Court in cases where the tax effect does not exceed Rs. 1,00,00,000/-. As the Revenue submitted that the tax effect in the present appeal was less than this stipulated threshold limit, the High Court dismissed the appeal as withdrawn. The Court explicitly stated that the substantial questions of law were kept open for determination in an appropriate case. No costs were awarded.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax-2, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 22.05.2019 passed by the Income Tax Appellate Tribunal (ITAT), 'D' Bench, Chennai. This order pertained to assessment year 2010-11 and was challenged by the assessee, M/s. Muktha Infrastructure (P) Ltd. The High Court admitted the appeal on specific substantial questions of law. During the hearing, the Revenue's counsel brought to the court's attention CBDT Circular No. 17/2019, which stipulates that appeals shall not be filed or pursued before the High Court if the tax effect does not exceed Rs. 1,00,00,000/-. The Revenue submitted that the tax effect in this particular appeal was below this threshold.

What were the issues?

The High Court was to decide the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right and justified in quashing the reassessment when the assessment had been re-opened even before the expiry of four years from the end of the relevant assessment year? 2. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the Assessing Officer (AO) had made any change of opinion? 3. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in following the decision of the Hon'ble Supreme Court in the case of M/s. Kelvinator India Ltd., when no change of opinion could be alleged on a factual situation? Contentions: Assessee: The judgment does not record specific contentions made by the assessee regarding the substantial questions of law. However, the Tribunal's order, which was under challenge, had quashed the reassessment and held that the AO had made a change of opinion, relying on the Supreme Court decision in M/s. Kelvinator India Ltd. Revenue: The Revenue contended that the Tribunal was not justified in quashing the reassessment and in holding that there was a change of opinion by the AO. The Revenue also questioned the Tribunal's reliance on the M/s. Kelvinator India Ltd. decision. Subsequently, the Revenue's counsel submitted that the tax effect in the appeal was below the threshold limit stipulated in CBDT Circular No. 17/2019.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

T.C.A.No.180 of 2021 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.08.2022 CORAM : THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No.180 of 2021 The Principal Commissioner of Income Tax-2, No.121, Mahatma Gandhi Road, Chennai - 600 034. ... Appellant Versus M/s.Muktha Infrastructure (P) Ltd., No.4/318, Marg Axis, Rajiv Gandhi Salai, Kottivakkam, Chennai - 600 041.

... Respondent (PAN:AAFCM0703Q) Appeal preferred under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, “D” Bench, Chennai, dated 22.05.2019 in M.P.No.66/Chny/2019. For Appellant : Mr.Karthik Ranganathan Standing Counsel For Respondent : Ms.V.Pavithra For M/s.Pass Associates Page 1/4 https://www.mhc.tn.gov.in/judis T.C.A.No.180 of 2021 J U D G M E N T (Judgment was delivered by R.MAHADEVAN, J.) This tax case appeal has been filed by the appellant / Revenue, challenging the order dated 22.05.2019 passed by the Income Tax Appellate Tribunal, 'D' Bench, Chennai in M.P.No.66/Chny/2019, relating to the assessment year 2010-11. 2. By order dated 29.03.2021, this court admitted the aforesaid tax case appeal on the following substantial questions of law: "(i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right and justified quashing the reassessment when the assessment has been re-opened even before the expirty of four years from the end of the relevant assessment year? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the AO has made any change of opinion? (iii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in following the decision of Hon'ble Supreme Court in the case of M/s.Kelvinator India Ltd., when no change of opinion could be alleged on a factual Page 2/4 https://www.mhc.tn.gov.in/judis T.C.A.No.180 of 2021 situation?" 3. When the matter was taken up for consideration, the learned Standing Counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeal shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in this appeal is less than the threshold limit. 4. In the light of the aforesaid submissions made by the learned Standing Counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs. (R.M.D., J.) (M.S.Q., J.) 30.08.2022 m s r

Internet : Yes.

Index : Yes / No. Page 3/4 https://www.mhc.tn.gov.in/judis T.C.A.No.180 of 2021 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. m s r To 1. The Income Tax Appellate Tribunal 'D' Bench, Chennai. 2. The Commissioner of Income Tax, (Appeals)-8, Chennai. 3. The Income Tax Officer, Company Ward IV (1), Chennai - 60 0034. T.C.A.No.180 of 2021 30.08.2022 Page 4/4 https://www.mhc.tn.gov.in/judis

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